An investment of P270,270 is needed for a Korean Mart that will produce a uniform annual revenue. This Korean Mart is operating daily (assuming 30 days a month) for 5 years and then have a salvage value
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- A company is setting up a project to buld housing Units in which the investment volume is estimated at ane million dollars to build (100 houses), the price of the house is (20,000) dollars, to be paid in equal installiments for a periad of (4 years), the annual Costs are estimated at (50) thousand dollars. Calculate the Simple rate of returm, the payoack period and the internal rate of retum for the project, bearing in mind that the lowest discount hiahest is (12'%). Will the project be accepted or rejected. rate is (8b) and the7. A building cost P10,000,000 and the salvage value is P150,000 after 25 years The annual maintenance cost is P60,000 costs of repair is P200,000 every 5 years. Find the capitalized cost if money worth 15% per annum?An existing machine in a factory has an annual maintenance cost of 40,000 pesos. A new and more efficient machine will require an investment of 90,000 pesos and is estimated to have a salvage value of 30,000 pesos at the end of 8 years. Its annual expenses for maintenance total to 22,000 pesos. If the company expects to earn 12% on its investment, will it be worthwhile to purchase the new machine using the a) present worth method?
- You are given the cash flow series for two projects, Alt. A and Alt. B. YEAR 1 2 3 4 5 6 Alt. A - F1 X X X + S1 Alt. B - F2 Y Y Y Y Y Y + S2 Assume that F2 > F1, and X, Y, S1, and S2 are positive; the incremental rate of return (i*) on the additional investment in Alt. B can be calculated with the following expression: = - = - = - · F2 + Y (P/A, i*, 6) + S2(P/F, i*, 6) (F2 F1) + (Y - X)(P/A, i*, 5) + (S2 - S1)(P/F, i*, 6) (F2 F1)(F/P, i*, 6) + (Y - X)(F/A, i*, 6) + (S2 - S1) (F2 F1)+(Y - X) + (Y + S2) - (X + S1) 0 = (F1 F2)(F/P, i*, 6) + (X - Y)(F/A, i*, 6) + (S2-S1) == 0 = F1 + X(P/A, i*, 6) + S1(P/F, i*, 6) 0F2+Y(P/A, i*, 6) + S2(P/F, i*, 6) 0 = - 0 = - F1 + X(P/A, i*, 5) + S1(P/F, i*, 6) F2+ Y(P/A, i*, 5) + S2(P/F, i*, 6)ligthing first cost of investment is $120,000. annual mtnce expenses are expected to be $6600 for the first 22 years and $9000 for each year thereafter. N=infinety amt of time, interest,i=12% per year, what is the capatalized cost of this project? the annuity table for value N=22 as follows: F/P=12.1003 P/F=.0826 P/A=7.6446 I tried mutliple ways to show and I can't figure it out. the answer is $176,653. Any suggestions is greatly appreciated. ThanksA printing press machine has a cash equivalent ofP250,000. For the first three years, it will provideP20,000 worth of profit each year. For the nextfour years, annual profit will be P35,000. For thelast two years, expenses will exceed revenues andwill have a loss of P10,000 each year. Calculatethe acceptability of this investment using Future Worthmethod if MARR is 18% per year. What is External Rate of Return if ϵ= 15%?
- Production engineers of a manufacturing firm have proposed a new equipment to increase productivity of a manual gas-cutting operation. The initial investment (first cost) is $5,00,000 and the equipment will have a salvage value of $1,00,000 at the end of its expected life of 5 years. Increased productivity will yield an annual revenue of $2,00,000 per year. If the firm's minimum attractive rate of return is 15%, is the procurement of the new equipment economically justified?2. Personal Finances A certain U.S. government savings bond can be purchased for $7,500. This bond will be worth $10,000 when it matures in 5 years. As an alternative, a 60-month certificate of deposit (CD) can be purchased for $7,500 from a local bank, and the CD yields 6.25% per year. Which is the better investment if your personal MARR is 5% per year?Referring to the following cumulative cash flow diagram, salvage value is most nearly 3M 10 ERY -IM $500000 $1M $750000 - s'NOILIGOd HSV)
- Example A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: Freeze Type A Type B First cost P200,000 P300,000 Annual Operating Cost P32,000 P24,000 D Annual Labor Cost P50,000 P32,000 Insurance and Property Taxes 3% 3% Payroll Taxes 4% 4% Estimated Life TO 10 If the minimum required rate of return is 15%, which equipment should be selected?A printing press machine has a cash equivalent ofP250,000. For the first three years, it will provideP20,000 worth of profit each year. For the nextfour years, annual profit will be P35,000. For thelast two years, expenses will exceed revenues andwill have a loss of P10,000 each year. Calculatethe acceptability of this investment using FWmethod if MARR is 18% per year. What is ERR if ϵ= 15%? Answers: FW=-683, ERR=4.84% kindly show detailed solutionABC Inc is considering the purchase of new pulverizing equipment. The top management of the company has requested that you provide the net present value for the equipment being considered. The relevant data for the new equipment are presented below: First Cost $125,000 Annual Income 10,000 Annual Operating Cost 8,000 (The first year and increasing by $750 per year ) Property Taxes 5% of first cost Salvage Value 8% of first cost ABC Inc has a minimum attractive rate of return (MARR) of 4% and the equipment has an expected useful life of 6 years